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-   -   Operating Leverage Formula (https://www.askmehelpdesk.com/showthread.php?t=676103)

  • Jun 27, 2012, 05:51 PM
    ParrotBird48516
    Operating Leverage Formula
    What is the formula for operating leverage please?

    I found this on a website:

    Operating Leverage = [Quantity x (Price - Variable Cost per Unit)] / Quantity x (Price - Variable Cost per Unit) - Fixed Operating Cost

    However the brackets confuse me and my calculations don't seem to match the one on the website's example. It looks like something being divided by the same something (creating 1) and then subtracting something that will give a negative answer!

    Please help!
  • Jun 27, 2012, 08:16 PM
    ParrotBird48516
    Quote:

    Originally Posted by ParrotBird48516 View Post
    What is the formula for operating leverage please?

    I found this on a website:

    Operating Leverage = [Quantity x (Price - Variable Cost per Unit)] / Quantity x (Price - Variable Cost per Unit) - Fixed Operating Cost

    However the brackets confuse me and my calculations don't seem to match the one on the website's example. It looks like something being divided by the same something (creating 1) and then subtracting something that will give a negative answer!

    Please help!

    I worked it out in the end! Thanks!
  • Jun 28, 2012, 02:34 AM
    paraclete
    I would like it all to be this easy
  • Jun 28, 2012, 07:17 AM
    ParrotBird48516
    So would I paraclete! Took my time and didn't over-think!!

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